Home-equity lending in 2011 fell to its lowest level in more than 20 years as crumbling house prices and rigid underwriting continued to hammer away at second mortgage lending. Banks, savings institutions and credit unions reported a total of $803.6 billion of home-equity loans in their portfolios at the end of the year, down 7.2 percent from the previous December. Depository institutions accounted for the lion’s share, 92.1 percent, of the $873.0 billion home-equity market. Finance companies were the only other significant player in the market, with $49.0 billion at the...(Includes two data charts)

In a development that ultimately could affect legions of homeowners who couldn’t get a permanent loan modification, the U.S. Court of Appeals for the Seventh Circuit recently gave the go-ahead to a borrower class action against a mortgage servicer for not providing a permanent loan modification under the Home Affordable Modification Program. “We believe this affects hundreds of thousands of people, if not more – not just at Wells Fargo, but also with respect to other banks – who haven’t been able to get their loan modifications like they should have, given their compliance with their trial plans...

Homebuyers rely on real estate agents to recommend specific lenders in about one-third of the mortgage-financed home purchases now taking place in the U.S. housing market. And despite the fact that many real estate brokerage firms have some sort of partnership with specific lenders, relatively little business appears to be generated by these arrangements. These are some of the major findings contained in a comprehensive new study of the home purchase mortgage market and the role real estate agents play in generating mortgage business for lenders. The study, “Key Factors in the Referral of Homebuyers to...

The settlements reached by five major mortgage servicers with a handful of states over their use of the Mortgage Electronic Registration System has not weakened the legal position of MERSCorp itself, according to industry experts. The new agreements signed by New York Attorney General Eric Schneiderman with Wells Fargo, Bank of America, JPMorgan Chase, Citigroup and Ally Financial has the banks paying a total of $25 million to the state in exchange for a release of further claims regarding the banks’ use of MERS throughout the servicing and foreclosure process and a pledge not to challenge...

A Senate subcommittee chairman has called upon the Federal Housing Finance Agency to recalculate and resubmit its principal reduction analysis to account for the Obama administration’s proposed enhanced incentives after an expert testified last week about a number of flaws in the study the FHFA used to justify its policy stance against writedowns of Fannie Mae and Freddie Mac loans. Sen. Robert Menendez, D-NJ, called for the FHFA do-over during a hearing of the Senate Banking Subcommittee on Housing Transportation and Community Development, where Amherst Securities’ Laurie Goodman said there...

The feds aren’t done cracking down on mortgage servicers and before the smoke clears, more than a half dozen companies are going to be facing fines that have been pending since federal regulators announced their servicing consent decrees last April, an official from the Federal Reserve told members of Congress this week. Last month, the Fed announced it had assessed monetary sanctions totaling $766.5 million against Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo for failing to appropriately oversee their subsidiaries’ mortgage loan servicing and foreclosure processing...

Nearly half of the money spent by Fannie Mae and Freddie Mac at the 2011 annual convention of the Mortgage Bankers Association was of questionable value, according to a new report by the Inspector General of the Federal Housing Finance Agency. The two government-sponsored enterprises spent a total of $600,000 at the MBA annual convention last year, the IG said. That included $140,000 in MBA sponsorships and $140,415 in business meals and hosted dinners. Freddie paid $80,000 for “Platinum” level sponsorship at the event, and Fannie paid $60,000 to be listed as a “Gold” sponsor. The tangible benefits include...

The emerging consensus among industry analysts and attorneys who are reviewing the finalized documentation of the $25 billion servicing settlement is that state and federal government law enforcement officials are just getting started in their efforts to hold the industry’s feet to the fire over flawed foreclosure practices. Last week, the Department of Justice finally made public the official complaint and consent judgments for the $25 billion servicing settlement that had been announced the month before, the details of which seem to be largely in line with expectations...

A $95 million settlement with the nation’s four largest mortgage servicers – Bank of America, JP Morgan Chase, Wells Fargo and Citigroup – was announced last week by U.S. Attorney Bill Nettles of the District of South Carolina, the largest False Claims Act settlement in the history of the state, according to Justice Department officials. The settlement is part of the $25 billion global resolution announced in February between major banks and state attorneys general to settle claims of abusive mortgage practices, including robo-signing of foreclosures...

In Wigod v. Wells Fargo Bank, the U.S. Court of Appeals for the Seventh Circuit earlier this month gave a mortgage borrower the green light to move ahead with class action litigation against the servicer of her mortgage for its failure to provide a permanent loan modification under the Home Affordable Mortgage Program. In this case, the borrower, Lori Wigod, and the servicer, Wells Fargo, entered into a HAMP trial period plan with the understanding that if Wigod complied with the terms of the plan for four months, Wells would offer her a permanent loan modification...